NEW YORK — Technology companies led the stock market higher Monday, pushing the Standard & Poor’s 500 index above the all-time closing high it reached earlier this month.
A pair of strong economic reports also encouraged investors. Wages and spending rose in the U.S. last month, and pending home sales hit their highest level in three years.
Shortly before 1:30 p.m. , the S&P 500 index (GSPX) was up 12 points at 1,594, a gain of 0.7 percent. That put the index above the record closing high of 1,593.36 it reached on April 11.
The Dow Jones industrial average rose 96 points to 14,808, a gain of 0.7 percent. Microsoft Corp. (MSFT) and IBM (IBM) were among the Dow’s best performers, rising 2 percent each.
Concerns about weak business spending and slower overseas sales have cast a shadow over big tech firms, said Marty Leclerc, the managing partner of Barrack Yard Advisors, an investment firm in Bryn Mawr, Pa. Revenue misses from IBM and other big tech companies have highlighted the industry’s vulnerability to the world economy. But Leclerc thinks tech companies with steady revenue and plenty of cash look appealing over the long term.
Information technology stocks rose the most of the 10 industry groups in the S&P Monday, up 1.5 percent. It’s the only group that remains lower over the past year, down 2 percent, versus the S&P 500’s gain of 14 percent.
The Nasdaq composite rose 32 points at 3,311, a rise of 1 percent. Apple Inc. (AAPL), the biggest stock in the index, rose 3.5 percent to $431.95.
The number of Americans who signed contracts to buy homes reached the highest level since April 2010, according to the National Association of Realtors. Back then, a tax credit for buying houses had lifted sales. Americans’ spending and income both edged up last month, the government reported Monday.
Moody’s and Standard & Poor’s parent company McGraw-Hill Cos. (MHP) surged following news that the ratings agencies settled lawsuits dating back to the financial crisis that accused them of concealing risky investments. McGraw-Hill gained 6 percent to $54.80, while Moody’s jumped 10 percent to $61.02, the biggest gain in the S&P 500.
Manufacturer Eaton Corp. (ETN) rose 5 percent to $61.31 after reporting that its quarterly net income jumped, beating Wall Street’s estimates. The results were helped by its acquisition of Cooper Industries, an electrical equipment supplier.
In the market for government bonds, the yield on the 10-year Treasury note slipped to 1.66 percent, close to its low for the year. That’s down from 1.67 percent late Friday.
Medtronic is a maker of medical devices, specializing in cardiovascular products like pacemakers, valve replacements, and various items to help repair problems in the circulatory system. But Medtronic also serves a number of other areas, including ways to treat spinal problems, diabetes and chronic pain.
One downside for investors is the fact that beginning this year, Medtronic has to pay a surtax on medical-device revenue, which was imposed to help pay for the health care reform law. Even with the tax sapping its profits, though, Medtronic will benefit from the needs of more patients needing treatment for heart-related illnesses and other ailments using its devices.
This iconic drugstore chain has been around for decades, paying ever-higher dividends to shareholders. As prescription drug use grows, Walgreen stands to have more traffic in its stores, and that in turn should drive more sales of the unrelated retail goods that the company stocks on its store shelves.
In addition to benefiting from older Americans, Walgreen has made a big push recently for international growth. Aging populations in economies around the world represent a great opportunity for Walgreen to expand beyond its domestic stronghold.
MetLife is one of the biggest providers of life insurance in the country. Insurers have gone through hard times in recent years, as poor investment returns and high payouts on certain types of insurance left them reeling from the financial crisis five years ago.
But for investors, MetLife’s moves have made it a stronger stock. It’s decision to stop offering long-term-care insurance has been tough on older Americans seeking protection from high health care costs, but its core insurance business benefits from the longer lifespans of an aging population. With some favorable products tailored to retirees, MetLife stands to make big strides forward in the years to come.
The scope of Johnson & Johnson’s business is wider than many people realize. In addition to its well-known consumer brands like Band-Aid, J&J also has sizable pharmaceutical and medical-device arms. Though many of its rivals have broken themselves up into smaller businesses to let the individual parts focus on their respective specialties, Johnson & Johnson still sees value in its conglomerate status.
Unfortunately, J&J has had problems with its hip replacement products, which led to recalls of certain devices. But the company has overcome similar short-term problems in the past. Given the size of J&J’s orthopedics business, which by itself dwarfs many of the companies that specialize in orthopedic devices, Johnson & Johnson still stands to gain from rising demand once it addresses any safety concerns.
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Omega Healthcare is a real estate investment trust that specializes in owning and operating health-care-related properties, with an emphasis on skilled nursing, assisted living, independent living, and rehabilitation facilities. A growing pool of retirees seeking the community environment that these facilities offer has led to higher demand in recent years, and those trends are only likely to continue as these communities benefit from the network effect of having older peers recommend them to (relatively) younger prospects.
For investors, the real estate investment trust framework ensures a steady stream of income for your portfolio. On that score, Omega’s dividend yield of 6 percent stands out as particularly attractive, topping several other similar health care REITs.
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